Monday, May 23, 2011

Flashy fashion grows as India’s rich flaunt wealth

In booming India, being rich is not enough. For the moneyed classes, it’s increasingly about flaunting their wealth in ways typical of the nouveaux riches in Russia, China or the Middle East.

India’s well-heeled used to be more shy about displaying their wealth in the decades after independence from Britain when a tightly-controlled economy and dominant socialist thinking limited the opportunities for showing off.

But many prosperous Indians are embracing conspicuous consumption, turning their backs on the mantra of frugality espoused by independence hero Mahatma Gandhi, the father of the nation who eschewed possessions.

“They have thrown off the parsimonious Gandhian phase when it was considered poor taste to flash wealth,” says Radha Chadha, co-author of “The Cult of the Luxury Brand” who has studied the affluent in Asian countries.

The biggest sign of changing attitudes to wealth and shopping can be seen in the stampede to India of flashy Western designer brands from Louis Vuitton, Prada, Chanel and Bulgari as well as sports car makers Ferrari and Maserati.

Attend any society event in Mumbai or the capital New Delhi and “it’s a brave woman who arrives without a designer handbag”, says Chadha, who is also a brand consultant.

In the past, dazzling extravagance was the exclusive domain of India’s former feudal leaders who splashed out on bespoke Rolls-Royce cars, diamonds the size of duck eggs, palaces and armies of servants during British rule.

Later, luxury-seeking consumers had to go mostly to boutiques in five-star hotels. But a shopping mall building boom is bringing to India the sort of air-conditioned high-end retail found commonly elsewhere in Asia.

“People are less inhibited in their spending,” said New Delhi furniture designer Raseel Gujral Ansal at an opening show of her creations last month as the city’s elite oohed over sofas, chairs, beds and tables.

Even Prime Minister Manmohan Singh has called for the rich to tone down their excesses and to “eschew conspicuous consumption”.

But Indian billionaire Azim Premji says the phenomenon is common in nations like China, Indonesia and Thailand where people are enjoying new wealth. “The first few years, people want to show visibly they are very rich,” he said.

He heads one of India’s largest outsourcing companies, Wipro, and is renowned for his frugal lifestyle and philanthropy in a field of domestic billionaires whose extravagance frequently makes headlines.

The country’s richest man Mukesh Ambani, moved last year into a billion-dollar, 27-storey skyscraper home in Mumbai with three helipads in a development that towers over nearby slums.

He once gave a $60-million Airbus jet to his wife as a birthday present.

“People always had money but now they are no longer afraid to reward themselves,” said Shreyans Group chief executive Ashish Chordia, an importer for Porsche and other sports cars in India.

“Last year was phenomenal,” says BMW India president Andreas Schaaf, referring to sales.

Aston Martin last month joined the list of luxury marques driving into India with plans to sell three models — the V8 Vantage, priced at $348,341, the Rapide at $483,146 and the One-77 at a whopping $4.5 million.

The Indian luxury market as a whole is forecast to triple to $15 billion by 2015 from $4.76 billion at present, according to global consultancy AT Kearney, though it still lags China’s which stands at $9.6 billion.

The number of Indians who have financial assets of over $1 million, excluding main residences, now stands at 127,000, the 2010 World Wealth Report by Merrill Lynch Capgemini says.

According to a new survey of 160 financial advisors by a private banking arm of Citibank, Indians are the most likely members of the global super rich to spend more on private jets and yachts over the next few years.

At the same time, observers say the new ostentation underscores how the divide between India’s wealthy and its poor is widening.

“It makes me uncomfortable how much people spend on weddings,” concedes one New Delhi society wedding organiser, who says families will regularly spend 10 million rupees ($225,000) on just one event in India’s multi-day weddings.

India is home to the world’s biggest number of poor people. Some 42 percent of Indians, or 455 million people, live on less than $1.25 a day, according to the World Bank.

India‘s statistics on health, infant mortality and malnutrition are worse than those for some countries in sub-Saharan Africa.

Shekhar Gupta, editor of The Indian Express, describes the well-off as “divorced and insulated” from poverty.

“We send our children to private schools, get treatment only in private hospitals, have our own security in gated communities, never need to use public transport,” he noted in a column.

At the glitzy Emporio mall in New Delhi, chauffeur-driven Mercedes, BMWs and the occasional Rolls-Royce or Bentley regularly pull up to disgorge wealthy occupants to shop at boutiques where handbags retail for $2,000 and more.

“I don’t take my mother-in-law here — she’s shocked at the prices,” said Shaila, a businessman’s wife, as she fingered a woven soft-leather Bottega Veneta bag priced at 136,899 rupees ($3,080) in one of the mall’s boutiques.

“I never tell her what I pay for things. She thinks it’s a lot if a handbag costs 500 rupees,” Shaila said, asking that her last name not be used.